CISR43690 - Register and maintain subcontractor: gross payment or payment under deduction: finalise incomplete tax treatment – Partnerships

CISR43000

Information contents

This action guide describes how to deal with a case where the system has been unable to complete the Tax Treatment Qualification Test for a partnership. The system will record a result of ‘Incomplete’ and will provide specific reasons for the automated test not being completed. Before using this action guide users must read CISR43070 and familiarise themselves with the information panel on TTQT.

• From the CIS Main menu select the type of Registration for which you wish to finalise the TTQT. For example, where the subcontractor acts both as a partner in a partnership and as a sole trader select the box alongside one of these and then the 'Manage TTQT' function.
• This will now take you to the ‘Tax Treatment Details’ window. Under the heading Tax Treatment Qualification Test History CISR will show you the results of where the TTQT is incomplete. Then select the [Finalise] button.
• The TTQT Summary window will now display showing you a list of all the test participants with incomplete results. This window also gives you the option of adding a participant where for example, a new partner has joined a partnership but the new partner has not yet been tested. Where this is necessary select the [Add Participant] button and enter details of the new partner as required.

In order to manually complete a TTQT it is necessary to first make the incomplete reason ‘Inactive’.

No non-registering partners found

Where TTQT has been unable to locate the SA records of any non-registering partners you will need to go to [View Customer] and select [Partner details]. This will provide you with the names and UTR’s for all partners within the partnership.

• Make a note of each partner’s UTR.
• Go to [SA View Statements].
• Input partner’s UTR.
• Select [View Statement] button.

The latest statement will then be displayed. You need to look at all liabilities that were due within the last 12 months so you may need to look at more than one statement. Do not consider any liabilities that fall outside of the 12-month qualifying period. You should make a note of the date the liability became due and the date the payment was made.

Use the table below to establish the result.

All SA payments settled on time	Pass
1 SA tax payment paid less than 28 days late	Pass
1 SA tax payment paid more than 28 days late	Fail
2 SA tax payments paid less than 28 days late	Fail
1 SA payment unpaid (more than 28 days late)	Fail
No SA payments due	Pass
SA non tax payments settled on time	Pass
1 or more SA non-tax payments paid late	Fail

Where CIS or SA shows that only one partner is registered under the partnership, you will need to investigate why this is, and obtain all the details of the other partners in the business in order that records may be set up within SA that will then flow across and create a CIS record for those partners.

Liability information for scheme not found

Where the subcontractor employs workers it is necessary to check that liabilities have been met in respect of Non-CIS schemes.

• From [CIS Main Menu] make a note of all schemes registered to the subcontractor
• You will need to check that all liabilities have been met by reviewing the data held on BROCS.

Use the table below to establish the test result

No employer liabilities due	Pass
Employer tax liabilities settled on time	Pass
1 or more employer tax liabilities paid more than 14 days late	Fail
3 (or less) employer tax liabilities paid less than 14 days late	Pass
1 employer tax liability unpaid	Fail
4 or more employer tax liabilities less than 14 days late	Fail
P35 and P14s due and not received	Fail
No P35 and P14s due	Pass
P35 and P14s due and received on time	Pass
Class 1A return due and not received	Fail
Class 1A due and received on time	Pass
No Class 1A return due	Pass

Voluntary Arrangement in place

Where a Voluntary Arrangement is in place

• You must make a submission to the CIS Advisory Team (See CISR97030) for advice with a copy of the voluntary arrangement before TTQT is completed. The CIS Advisory Team will check whether the obligations of the voluntary arrangement have been met.
• B/F the case for 21 days for advice from the CIS Advisory Team.

Participant under enquiry

• Obtain participant's UTR from ‘Incomplete TTQT Summary Screen’.
• From [SA Case Summary] Select [Compliance]. This will take you to ‘View Compliance Summary’.
• Select the relevant year that is under enquiry.
• Select [View].

This will now display the name of the Compliance Caseworker dealing with the enquiry. Contact the Enquiry Caseworker to obtain details of the nature of the enquiry and the possible effect it has on TTQT. Refer any cases of difficulty to a Higher Officer/Senior Officer.

Non-standard partnership

A Non-standard partnership is a partnership where one partner is not an individual.

• Go to [View Customer]
• Select [Partner Details]

This will provide you with details of all partners within the partnership; make a note of all partners and their reference numbers. You should then carry out a manual TTQT (see CISR43030) using the SA or COTAX UTR for each of the partners within the business.

Updating TTQT Information

Once you have completed all the required checks you need to update the system and record your result.

TTQT Result

The results from a TTQT can be ‘Pass, ‘Fail’ or ‘Incomplete’. If any reason is recorded as a ‘Fail’ the overall result of TTQT will be that the application for gross payment status fails. Any reason classed as ‘Incomplete’ needs to be manually checked and the outcome recorded before TTQT can be completed. All reasons with ‘Active’ status will be automatically printed onto the letter issued to the subcontractor (CIS308).

A TTQT type of ‘Incomplete’ occurs when the system has been unable to locate the information it needs to complete the check. These cases are referred for manual action to complete checking process.

To record your result

• Select [Finalise TTQT]
• From the ‘Participant Summary’ window select the result reason that you have checked. The result will show as ‘Incomplete’ and the status will be ‘Active’. You will need to make the status ‘Inactive’, to do this go to [Inactivate Reason] this will then change the active status from ‘Yes’ to ‘No’.

Where the manual checks pass the test requirements

• Go to [New Reason]
• This will take you to the ‘Add Reason’ window.
• Select ‘Pass Reason’ and go to the drop down box.
• Select relevant reason from the list presented.
• Select [OK]

This will take you to the ‘Participant Summary’ and will record the reason and show the ‘Type’ as ‘Pass’. The status will be ‘Active’.

When you are sure that all the information is correct select [Confirm Result]. The status of the result will change to ‘Confirmed’.

Where the manual checks fail the test requirements

• Go to [New Reason]
• This will take you to the ‘Add Reason’ window.
• Select ‘Fail Reason’ and go to the drop down box.
• Select relevant reason from the list presented.
• Select [OK]

This will return you to the ‘Participant Summary’ and will record the reason you have entered and show the ‘Type’ as ‘Fail’. The status will be ‘Active’.

When you are sure that all the information entered is correct select [Confirm Result]. The status of the result will change to ‘Confirmed’.

Following this CIS will issue form CIS313 to the subcontractor where the result is a [Pass], and form CIS316A will be issued to the various contractors that have paid the subcontractor within the last 2 years advising them of the subcontractor’s new payment status.

Where the result is a [Fail] then a CIS308 will be issued to the subcontractor outlining the reasons for failure, nothing will then be issued to the contractors’ if the subcontractor is already on net payment status. However, if the subcontractor is currently on gross payment status then the CIS316A will not be issued until 55 days after the TTQT is run, to allow time for any appeal from the subcontractor to be settled. The contractors’ will be told in this instance that the new payment status should be applied from a date which will be 90 days after the TTQT.

Update Test

If you have to terminate the TTQT check before it is fully complete you can save any checks done by selecting the [Update Test] button. This will ensure that work is saved and will enable you to complete the remainder of the test at a later stage.